Friday, 27 September 2019

Self Help Group-6 , Banking Fundamentals to Know for Students.

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Direct SHG Bank Linkage: Eligibility
  • The size of the SHG should be preferably between 10 and 20 members to enable effective individual participation in the group’s deliberations.
  • The group should have been in active existence for at least a period of six months. The group may be informal or formal (registered).
  • The group should have successfully undertaken savings and credit operations from its own resources.

Direct SHG Bank Linkage: Eligibility
  • Democratic working of the group wherein all members feel that they have a say should be evident.
  • The group is maintaining proper accounts/records.
  • The branch should be convinced that the group has not come into existence only for the sake of participation in the project and availing benefits thereunder. There should be a genuine need to help each other and work together among the members.
  • The SHG members should preferably have homogeneous background and interest.

Direct SHG Bank Linkage: Eligibility
The group should have satisfactory internal savings and credit activity for at 
least six month
To be assessed in terms of Group dynamics like -vibrancy,
cohesion, goal-oriented action, participation of members,
democratic decision and collective leadership group 
functioning  (actually as a group, or not) regular meetings
maintaining a record of financial/other transactions norms 
regarding membership, meetings, etc Group leaders to be 
elected by members and rotated periodically

Transparency in operations of the group and participatory 
decision making
Rates of interest on loans to  be decided by the group
Group liability and peer pressure to act as substitutes for 
traditional collateral.
Savings - amount, periodicity
Credit - procedure for sanction, ceiling amount, purposes, 
rate of interest to be charged, repayment period, etc.
Fines - in case of default in attending meetings, savings, and 
credit repayment. Group may also levy fines for any deviant behavior etc.
Personal/social improvement - minimum literacy level to be 
achieved, social work to be done etc.

SHG - Bank linkage: a practical approach

Identification of active SHGs in the villages & establishing 
close contacts.

Opening of a SB A/c. in the name of SHG with a resolution 
copy from the SHG.

Receiving loan application from the SHG duly sponsored  by 
the promoting NGO if any.

Attending a group meeting at the village to

 observe the SHG and verify the records  and                 find out the objectives of  SHG/NGO. 

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